If a stock's price is $120 and it pays a dividend of $6, what is the dividend yi

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Question: If a stock\'s price is $120 and it pays a dividend of $6, what is the dividend yield?

Options:

Correct Answer: 5%

Solution:

Dividend Yield = (Dividend / Price) * 100 = (6 / 120) * 100 = 5%.

If a stock's price is $120 and it pays a dividend of $6, what is the dividend yield?

If a stock's price is $120 and it pays a dividend of $6, what is the dividend yield?

Step 1: Identify the stock price. In this case, the stock price is $120.
Step 2: Identify the dividend amount. Here, the dividend is $6.
Step 3: Use the formula for dividend yield, which is Dividend Yield = (Dividend / Price) * 100.
Step 4: Plug in the values into the formula: (6 / 120) * 100.
Step 5: Calculate the division: 6 divided by 120 equals 0.05.
Step 6: Multiply the result by 100 to convert it to a percentage: 0.05 * 100 equals 5%.
Step 7: Conclude that the dividend yield is 5%.

Dividend Yield – The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.